New York, February 12, 2026, 10:35 (ET) — Regular session
- Shopify shares dropped roughly 8% in early U.S. trading following a steep post-earnings rollercoaster.
- The company projected a dip in its first-quarter free cash flow margin, despite signaling robust revenue growth.
- Investors are eyeing the Feb. 17 kickoff of a $2 billion buyback and looking for clues on spending patterns.
Shopify Inc shares dropped 7.8% to $109.44 in Thursday morning trading, retreating from an early surge that briefly lifted the stock above $121. So far, the price has swung between $108.69 and $121.50 during the session.
Shopify’s revenue forecast remains solid, but the company warned investors to expect tighter cash flow this quarter. The focus stays squarely on one aspect of the outlook: cash generation.
This matters since Shopify often serves as a gauge for online retail and its associated software firms. When a stock drops following a beat-and-raise, it signals investors are focusing less on sales and more on expenses.
Shopify posted $3.672 billion in revenue for Q4, with gross merchandise volume hitting $123.841 billion, reflecting total sales through its platform. The company pulled in $715 million in free cash flow during the quarter and expects first-quarter free cash flow margins in the “low-to-mid teens.” It’s also projecting revenue growth in the low-thirties percentage range. CFO Jeff Hoffmeister emphasized that the repurchase program kicks off “from a position of financial and operating strength.” SEC
Shopify announced in a filing that its board has greenlit share repurchases totaling up to $2.0 billion of its Class A subordinate voting shares, limited to 5% of that class. The buyback program kicks off on Feb. 17 and doesn’t have a set end date. The company said it may execute the plan via open market purchases or privately negotiated transactions, including through Rule 10b5-1 trading plans.
Shopify’s shares dropped 10% on Wednesday as investors digested lower free cash flow margin forecasts and a weaker profit outlook, despite the company projecting first-quarter revenue growth above Wall Street’s expectations, Reuters reports. Gil Luria, an analyst at D.A. Davidson, described the results as “an excellent result for Shopify.” Meanwhile, Shopify President Harley Finkelstein noted, “The AI era has now reached commerce,” highlighting a 15-fold surge in orders from AI search queries since January 2025. Reuters
Shopify’s AI efforts also focus on enabling shopping through chatbots. Last year, OpenAI launched “Instant Checkout” in ChatGPT, initially partnering with Etsy sellers, and announced that over a million Shopify merchants would be joining soon. OpenAI
Gross merchandise volume, or GMV, represents the total value of orders processed through Shopify’s platform. It can shift independently of revenue since Shopify earns only a portion of each sale. Free cash flow refers to cash left after capital expenditures, with the margin showing that amount as a percentage of revenue.
Traders are now watching to see if Shopify can sustain revenue growth in the low-30% range without operating costs and marketing expenses edging higher. The first-quarter cash-flow margin forecast has turned into the benchmark to watch.
Things can still swing the other way. If consumer spending weakens or merchants cut back, volumes could drop fast. The market doesn’t hesitate to slam software companies perceived as at risk from AI disruption — even if demand remains strong.
Shopify’s buyback authorization kicks in on Feb. 17, a key date investors are watching closely. They’ll be focused on the pace of buybacks and whether the first-quarter cash-flow forecast remains on track.
